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Month: August 2018

Before moving on to the principles in the Continuous Improvement dimension, I want to introduce a new principle that has been proposed for the Cultural Enablers dimension. For purposes of this blog, I have named this principle “Build a Learning Organization.”

Justification – “An Inflection Point”

In January 2017, I wrote a blog called “An Inflection Point.” Let me quote some sections from that blog:

A few months ago, I had the chance to visit two companies that the Shingo Institute uses as “benchmark” companies. Both of these companies started their Lean journey about 20 years ago. Both companies received the Shingo Prize about 10 years ago. And both companies have continued their journey seeking perfection since receiving the Shingo Prize. We hope all Shingo Prize recipients follow their example in continuing their own journeys.

At both benchmark companies, I heard a similar story. It caught me by surprise. Let me explain.

In my career, I’ve had four to five Lean implementation opportunities that were either start-ups where we had the opportunity to build the culture from scratch, or involved a transformation of an existing culture. After being with an organization for seven to eight years, typically another professional opportunity came up and I moved on. I’ve never seen a Lean journey first-hand past seven to eight years. In my experience, I’ve always thought the highest productivity gains come in the earlier stages of the Lean journey. In many cases, there are so many opportunities that it’s easy to cherry-pick and find places where the application of Lean can make a big difference.

This is not the report of these benchmark companies. Both companies report that they experienced steady productivity gains of 10% or a little more, compounded year-over-year over a 10-15 year time period. This is amazing enough. But then, they both reported that in the past two to three years they experienced an inflection point, where the productivity gains jumped from the steady 10% or a little more to 15-20% productivity gains the past two to three years. This is astonishing!

After verifying their reports, I asked them a series of questions so I could better understand how they could experience such astonishing results – especially after so many years of steady, great, results. Independently, both companies reported the reason for this inflection point is due to the level of training achieved by their associates. In short, their associates are now so well-trained that they can identify problems, solve problems, and implement changes so quickly and independently that the associates drive the productivity gains.

Both companies operate in-house universities where they teach lean tools and systems – things like SQC tools, error-proofing techniques, time-motion studies, TPM systems, and other problem-solving skills. Associates spend a significant amount of time on regular intervals training in these in-house universities. Over time, the skill level of associates is such that they can implement profound changes quickly and independently, without needing significant support from management or engineering.

Since this blog report, I’ve been able to follow up with our other benchmark companies and they all report the same results. These are the best of the best and they all report that the key to being able to accelerate their improvement efforts on a sustainable basis is by creating a learning organization.

Key Elements and Systems

It is important to note that people learn, inanimate organizations do not. But, just as we say an organization has a culture which is made up of the cumulative behaviors of the people in the organization, similarly, we can say that the knowledge of an organization is the cumulative knowledge of the people in the organization. A “learning organization” means that cumulative knowledge of the people in the organization is increasing over time.

Some may suggest that this principle is already incorporated in the principle of “Embrace Scientific Thinking,” and that this is not a separate and distinct principle. I agree that “Embrace Scientific Thinking” and this principle are closely intertwined. But scientific thinking is primarily a problem-solving discipline. Along with “Respect Every Individual” and “Lead with Humility,” this principle completes the Cultural Enablers dimension. Yes, people need to be properly trained in scientific thinking for behaviors to support a learning organization. As problems are solved, new discoveries are made, and those discoveries should be shared, thereby adding to the cumulative knowledge of the organization. But scientific thinking alone is not a principle that describes how to build the right culture. The two principles are closely intertwined, but they have a different emphasis. This principle is about creating a culture of learning.

A key system in the implementation of this principle is a knowledge sharing (yokoten, or 横展) system. I have seen some very good knowledge sharing systems. An example is a global company making similar product in numerous plants around the world. In this company, as changes are made to improve a common process, the party making those changes posts the details to a knowledge-sharing intranet site. There is a regular knowledge sharing meeting of all parties around the globe once per month. All parties making a similar product review the changes prior to the meeting. In this case, the policy of the company is that each team is required to review and test the changes made elsewhere, but ultimately has the authority to accept those changes in their own plant. This is a great system. But when I have inquired about key behavioral indicators (KBIs) for this system (i.e., # of ideas shared, # of ideas accepted or rejected, etc.), none of the companies I have visited were able to report any KBIs.

Knowledge without action based on that knowledge is a waste. Knowing must lead to doing, which is why measurable KBIs have to be a part of building a learning organization.

It is reasonable, such as in the example above, that local facilities are allowed to accept or reject improvements discovered elsewhere. Local conditions – such as a local supplier with different quality problems – may differ from place to place. Allowing local facilities to accept or reject improvements is a sign of respect and empowerment. However, there also needs to be a robust system in place to destroy any signs of the dreaded “not invented here” syndrome.

In addition to a knowledge-sharing system, other key systems that the benchmark companies employ to ensure the organization is learning. Some examples follow. Included are systems that are also critical to other Shingo Guiding Principles.

A robust training system designed to lift the skills and knowledge of all people in the organization;

An effective coaching system to develop people so that the people are able and willing to learn;

As mentioned above, a robust problem-solving system that follows scientific thinking that continuously generates new knowledge and clarifies appropriate actions.

And, as with all the guiding principles that enable culture, there are important systemic roles that leaders must take to make sure the systems are working and are driving the right useful knowledge and actions. This must be a part of leader standard work.

Specific Proposals

A principle similar to this was in Professor Jeffrey Liker’s book, The Toyota Way. In the book, Liker reports that a principle in the Toyota Way is: Become a learning organization through relentless reflection and continuous improvement.

Various people have suggested an additional Shingo Guiding Principle similar to this Toyota principle. Let me share a few:

Learn Continuously

Cultivate a Deep-and-Fast Learning Organization

Create a Learning Organization

Here are some thoughts on why “Build a Learning Organization” is the working title for now:

“Relentless reflection” is a part of the principle, but the principle is broader than that.

“Continuous improvement” is a dimension in the Shingo Model. The Continuous Improvement dimension, and especially the principle of “Embrace Scientific Thinking” in that dimension, is intertwined with this principle, as discussed above.

“Learn continuously” seems to apply to individuals and not the organization as a whole. To build a sustainable organization, the organization as a whole needs to be expanding in knowledge and application.

The proposal to include “deep” and “fast” included a rationale. “Deep” is associated with deep insight and expertise, whereas “fast” is about learning faster than the market moves. My thought is that these points can be part of how we teach the principle, but the principle is broader than these two points.

So “Build a Learning Organization” is the working title. Other action verbs that imply an on-going action that we might use besides “build” include: cultivate, nurture, nourish, foster, support, encourage, or promote.

Principles Should Be Discovered and Shared

Since inviting people to suggest any missing principles in my first blog about Model changes a few weeks ago, some people have approached me personally or by email and requested that we not add any new principles. They argue that ten is enough, or, as some suggest, it is too many.

To us at the Shingo Institute, a principle is a principle.We don’t create principles of operational excellence, we discover them. We share them. We teach people to understand them, and then how to implement them. We don’t ignore principles. We have observed from sad experience that ignoring a principle inevitably leads to the inability of an organization to sustain their improvement efforts. If this principle is not followed, the likely consequence will be that even great organizations will plateau in their improvement efforts, and it will stifle innovation.

The Proposal

My proposal is that we add this principle as a new Shingo Guiding Principle, and that we include this principle in the Cultural Enablers dimension. This proposal does NOT mean that this change will happen. It will take a lot more discussion and deliberation. As part of that process, we are interested in what YOU think about this proposal!

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Further Reading

The idea of a learning organization is not new. Peter Senge suggested this principle in his book, The Fifth Discipline, which we cite frequently in our curriculum as part of the Shingo Guiding Principle of “Think Systemically.” However, my favorite book on this topic is a book by Arie de Geus called The Living Company. I recommend it.